Even if the contract says they are an independent contractor, they may still be an employee and the contractor exemptions will not apply. Having an ABN specifically does not automatically mean that a worker is a contractor.

There is also the possibility that superannuation is required to be paid for some of these contractor payments.

Contractor exemption – 180 days vs 90 days rule

The 180 day exemption focuses on the type of services the business uses. The 90 day exemption focuses on the contractor and the number of days they provide their services. The 180-day exemption does not extend the 90-day exemption.

Grouping

Failing to recognise grouping of employers

For payroll tax purposes, businesses can be grouped with other businesses if there is a link between the companies. Grouping can occur regardless of where the businesses operate. Grouping has important implications for calculating threshold entitlements.

every member of the group is liable for any outstanding payroll tax of other group members.

What should I do if I find an error?

If you fail to include all liable amounts in your monthly payroll tax returns for the current financial year, you should ensure these amounts are included in your Annual Reconciliation Return. If you identify you haven’t included all amounts in your payroll tax returns for previous financial years, please contact your Account Manager on 1300 533 787 so we can help you arrange a voluntary disclosure.

Keeping Co. is a team of experts; Cloud Accountants, Business Advisors, Finance Specialists working together to provide a complete solution for the Australian Small to Medium Business owner.

The information provided here is general for Australians and should not be your only source of information. We recommend consulting an experienced Chartered Accountant or Registered Tax Agent as each business’s circumstance will vary.